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As Good as It Gets?

The economy was weak in 2011, but it ended better than it started, with growth up from its lows and unemployment down from its highs. The question now is whether that progress will continue into 2012. We wish we could say yes, but unless policy makers are incredibly lucky or remarkably adept — certainly not the description that comes to mind when thinking of, say, Congress — the answer is no.

When data is released later this month, economists expect growth of around 3 percent for the last quarter of 2011, compared with 1.2 percent on average in the first three quarters. But there is little in the latest growth spurt to signal a self-reinforcing recovery going forward.

Holiday shoppers had more cash to spend because of the decline in oil prices, not a rise in wages. A drop in the jobless rate was driven by a mix of new hiring and a large number of potential workers who gave up futile job searches. Signs of life in the housing market, including more sales, were dampened by falling prices as foreclosures continued.

The way to revive sustainable growth is with more government aid to help create jobs, support demand and prevent foreclosures. As things stand now, however, Washington will provide less help, not more, in 2012. Republican lawmakers refuse to acknowledge that government cutbacks at a time of economic weakness will only make the economy weaker. And too many Democrats, who should know better, have for too long been reluctant to challenge them.

The drag from premature cuts is significant. Waning stimulus spending subtracted an estimated half a percentage point from growth in 2011; this year, cutbacks will very likely cost the economy a full percentage point of growth. That means the best-case economic projection is for a new year of anemic expansion and high joblessness — muddling along with growth of about 2 percent, which is too weak to push unemployment much below its current 8.6 percent.

And even that dismaying prospect assumes that Congress will extend the payroll tax cut and federal unemployment benefits beyond their expiration in late February. It also assumes that the inevitable recession in Europe and the expected slowdown in China will be shallow and pose no real threat to the United States recovery. If those assumptions are wrong, growth in the United States economy, if any, will be exceedingly meager and joblessness will rise.

It does not have to be this way. After nearly a year of trying to accommodate Republicans in their calls for excessive budget cuts, President Obama finally pushed a strong jobs bill including spending for public works, aid to state and local governments and an infrastructure bank, as well as renewal of a payroll tax break and jobless aid. Congressional Republicans blocked the bill, and with it, the chance to create some 1.9 million jobs. But late last month, the Republican leadership in the Senate and House retreated — even if extremists in the party did not — and managed to temporarily extend the payroll tax cut and jobless benefits.

The extension is only for two months, setting up another fight. But the good news is that in the showdown, Mr. Obama and the Democratic leadership did not back down. And at least some Republicans seemed to realize that their relentless calls for cutting may have a political cost.

The economy, and struggling Americans, need a lot more help. Mr. Obama needs to translate his newfound focus on the middle class into an agenda for broad prosperity, making the case that what the nation needs now is a large short-run effort to create jobs coupled with a plan to cut the deficit as the economy recovers.

A version of this editorial appears in print on January 1, 2012, on page SR10 of the New York edition with the headline: As Good as It Gets?. Today's Paper|Subscribe